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It's hard not to be blown away by their revenue, profit, cashflow from operations graphed over the past five years: https://valustox.com/NVDA https://valustox.

It's hard not to be blown away by their revenue, profit, cashflow from operations graphed over the past five years: https://valustox.com/NVDA https://valustox.com/NVDA A financial performance for the ages, and they look set to keep it up. Unfortunately for new investors, their market cap is even more insane, giving them a crazy PE ratio of 73.

Ologn 3y ago
> a crazy PE ratio of 73 Their PE ratio was over 100 before the earnings announcement last week, so it has fallen. 18.12B revenue, 9.24B net this last quarter - 6.05B revenue, 1.41B net three quarters ago. With growth in revenue and net this quick, the 12 month trailing P/E ratio will be high.
AnotherGoodName 3y ago
I agree people may have missed the boat but for that PE ratio i wouldn't focus too much on it as PE is calculated using 1 year of past data. It fails spectacularly in providing a valuation when there's extreme YoY growth which there is here. See the PE chart of Nvidia here and notice the large step changes everytime a quarterly report comes out: https://ycharts.com/companies/NVDA/pe_ratio https://ycharts.com/companies/NVDA/pe_ratio . As each quarter where they had <1/10th the earnings is pushed out of the PE calculation they have a big step change. Their forward PE is 25.32x right now. They have an expected 8% quarterly growth forecast. The FAANG have PE's higher than that and much lower growth. Really on fundamentals of PEG (PE and growth) Nvidia is pretty good value. But... There's huge risk here. Will they continue or will a competitor emerge? Can they rely on chips from Taiwan? etc. So the investor story isn't that they have a crazy PE. They honestly don't. The investor story is that fundamentals for Nvidia look quite good but there's also risks looming.
- FredPret 3y ago
  All good points. I guess PE is better for steady-state businesses like utilities. But even with PEG, $NVDA is quite high - I get 16, but I much prefer this to be below 1. None of this means they're not a good buy, just that it would've been really fantastic to already be an owner.
  - AnotherGoodName 3y ago
    For that PEG did you calculate quarterly 8% = 36% (after compounding) You should get a PEG <1. (25/36)
    - FredPret 3y ago
      I couldn't find a consistent definition for it so I used the past five years. That's another factor that would weigh against fast-growing tech companies. Maybe the best portfolio would be one part proven, stable value investments picked using measures like PE and PEG, and one part tech companies that are chosen for future profit potential, which you can't really measure or forecast so much as make an educated guess.

Ologn 3y ago

> a crazy PE ratio of 73 Their PE ratio was over 100 before the earnings announcement last week, so it has fallen. 18.12B revenue, 9.24B net this last quarter - 6.05B revenue, 1.41B net three quarters ago. With growth in revenue and net this quick, the 12 month trailing P/E ratio will be high.

AnotherGoodName 3y ago

I agree people may have missed the boat but for that PE ratio i wouldn't focus too much on it as PE is calculated using 1 year of past data. It fails spectacularly in providing a valuation when there's extreme YoY growth which there is here. See the PE chart of Nvidia here and notice the large step changes everytime a quarterly report comes out: https://ycharts.com/companies/NVDA/pe_ratio https://ycharts.com/companies/NVDA/pe_ratio . As each quarter where they had <1/10th the earnings is pushed out of the PE calculation they have a big step change. Their forward PE is 25.32x right now. They have an expected 8% quarterly growth forecast. The FAANG have PE's higher than that and much lower growth. Really on fundamentals of PEG (PE and growth) Nvidia is pretty good value. But... There's huge risk here. Will they continue or will a competitor emerge? Can they rely on chips from Taiwan? etc. So the investor story isn't that they have a crazy PE. They honestly don't. The investor story is that fundamentals for Nvidia look quite good but there's also risks looming.

FredPret 3y ago
All good points. I guess PE is better for steady-state businesses like utilities. But even with PEG, $NVDA is quite high - I get 16, but I much prefer this to be below 1. None of this means they're not a good buy, just that it would've been really fantastic to already be an owner.
- AnotherGoodName 3y ago
  For that PEG did you calculate quarterly 8% = 36% (after compounding) You should get a PEG <1. (25/36)
  - FredPret 3y ago
    I couldn't find a consistent definition for it so I used the past five years. That's another factor that would weigh against fast-growing tech companies. Maybe the best portfolio would be one part proven, stable value investments picked using measures like PE and PEG, and one part tech companies that are chosen for future profit potential, which you can't really measure or forecast so much as make an educated guess.